From the Perspective of Classical Macroeconomic Theory, an Excess of Aggregate

question 118

Multiple Choice

From the perspective of classical macroeconomic theory, an excess of aggregate spending would:

• A) Increase aggregate output and the level of employment in the economy
• B) Decrease the rate of interest and lower the level of investment
• C) Increase consumption, and thus move the economy toward the full-employment level of output
• D) Increase prices, wages, and interest rates, and thus reduce aggregate spending to equal the full-employment level of output

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